Microsoft Build 2025: Shaping the Future of Agentic AI and Open Web Protocols

The sun is rising on a new era of AI at Microsoft Build 2025, where the keynote message is practically a mandate: we are entering the age of agentic artificial intelligence. Sitting at the intersection of technical innovation, developer democratization, and enterprise transformation, Microsoft’s announcements at Build paint a portrait of an “open agentic web,” where intelligent agents act on users’ behalf—in code, in business, and, soon, in everyday life. This moment is charged with both promise and peril, as the world’s largest software ecosystem repositions itself around models, protocols, and platforms designed to make AI agents not just a feature, but a substrate of the modern internet.

A Vision: From Smart Assistants to Autonomously Acting Agents​

The road to this moment is paved with the evolution of AI from simple, rule-driven bots to sophisticated agents capable of memory, autonomous reasoning, and task orchestration. Microsoft’s announcement rests on the claim that their AI platforms, from GitHub Copilot to Azure AI Foundry, have crossed key thresholds in AI reasoning and memory, supporting agents that can manage complex, multi-step processes across diverse domains.

• Concrete Milestones:
• 15 million developers are already using GitHub Copilot, a testament to the platform’s reach and the appetite for AI-augmented code creation.
• 230,000 organizations, including a remarkable 90% of the Fortune 500, have leveraged Copilot Studio to build AI agents and automate workflows.
• Enterprises including Fujitsu, NTT Data, and Stanford Health Care are running real-world, high-stakes workloads using Microsoft’s agentic infrastructure.

These numbers are headline-worthy but, as always, should be interpreted with care. While widespread adoption suggests momentum, precise utilization rates or productivity outcomes for agent-driven automation remain less transparent—and independent long-term studies on value impact are still pending.

Reimagining the Developer Experience​

Microsoft is unequivocal: developers are center stage. But what does agentic AI actually mean for those who build, deploy, and maintain software?

GitHub Copilot: Evolution From Assistant to Agent​

The new “agent mode” for GitHub Copilot represents a sea change. Where Copilot was once content to offer autocomplete suggestions or context-aware code snippets, it is now being positioned as a hands-on, proactive assistant. In asynchronous agentic mode, Copilot actively takes on coding chores—writing boilerplate code, testing, troubleshooting—without waiting for explicit, line-by-line prompts. This shift from a reactive tool to an autonomous agent is significant:

• New Features:
• Prompt Management: Teams can create, curate, and refine agent instructions collectively.
• Lightweight Evaluations & Enterprise Controls: Bringing experimentation and governance directly into the developer workflow.
• Open-Source Copilot Chat in VS Code: A major move towards transparency, with the Copilot Chat extensions now part of the open-source mainstream.

The open-sourcing of Copilot Chat is particularly momentous for the open-source community, offering unprecedented insight into the workhorse behind one of the world’s most popular dev environments. However, Microsoft’s stewardship of such a project carries inherent tensions when balancing open governance and proprietary interests.

Windows AI Foundry: AI on the World’s Most Ubiquitous Platform​

Where does Windows fit in an AI-first world? With the introduction of Windows AI Foundry, Microsoft positions Windows as the preeminent platform for local and cloud-based AI workloads:

• Unified Platform: Supports the complete AI developer lifecycle, from training to inference, across both open-source and proprietary large language models (LLMs).
• Foundry Local: Lets developers run open-source models on Windows devices—enabling edge AI and reducing cloud dependency.
• Model Conversion & Deployment: Streamlines taking proprietary models from research into production at scale.

This is a significant pivot: rather than simply integrating AI features into Windows, Microsoft is turning the OS itself into a foundational AI platform. The company frames this as opening new vistas for scale, flexibility, and opportunity—an assertion which could be validated as more developers and organizations adopt AI workflows directly on their local machines.

Azure AI Foundry & Ecosystem Expansion​

Azure AI Foundry emerges as Microsoft’s “AI nerve center”—a platform for designing, customizing, and managing AI applications and agents. Several highlights:

• Model Diversity: Over 1,900 partner-hosted and Microsoft-hosted AI models are available, now including the Grok 3 and Grok 3 mini models from xAI.
• Model Leaderboard: Offers real-time ranking of top-performing models across different categories and tasks, enabling better model selection for given workloads.
• Model Router: Dynamically selects the optimal model for a specific query or task—helping organizations maximize performance while controlling costs.

Azure AI Foundry’s embrace of open models and its “Model Router” are an explicit nod to the contemporary reality that no single AI model is best for every use case—a philosophy increasingly echoed by leaders across the industry.

Security, Trust, and Governance: Guardrails for the Age of Agents​

In a world where software agents can take autonomous action, security and oversight are paramount. Microsoft responds with a multi-pronged approach centered around identity, observability, and compliance.

Agent Identity with Microsoft Entra Agent ID​

One persistent risk in agentic architectures is “agent sprawl”—the proliferation of poorly tracked, inadequately governed AI agents operating throughout an enterprise. Microsoft addresses this with Entra Agent ID, which automatically assigns each agent a unique, traceable identity within Entra directory services. This provides:

• Improved Lifecycle Management: Enterprises can more easily manage, audit, and decommission agents as needs evolve.
• Tighter Access Control: Because agents have digital identities, access to enterprise data and resources can be policed according to highly granular, policy-driven controls.

This approach is notable for its melding of traditional IT governance with cutting-edge AI agent deployment—a practice that many security experts have called an urgent industry priority.

Observability and Safe Deployment​

The Azure AI Foundry Observability dashboard provides built-in metrics for key agent performance indicators: quality, cost, safety, and detailed traceability of actions. Safety remains a critical concern, with Microsoft citing features that help:

• Evaluate performance and risk parameters
• Automate policy evaluations
• Generate detailed operational reports for compliance

Despite these advances, the full security posture depends greatly on proper configuration and disciplined management by the enterprise—a lesson underscored by historic breaches in cloud and identity services elsewhere in the industry.

Data Protection and Compliance​

Agents built on Azure AI Foundry benefit from integration with Microsoft Purview, offering data security and compliance controls, as well as comprehensive audit trails. These tools promise to help organizations satisfy evolving regulatory frameworks, particularly as AI regulation intensifies globally.

Microsoft 365 Copilot: Customization, Orchestration, and the Next Step for Business AI​

With Microsoft 365 Copilot Tuning, organizations can now adapt AI agents to their specific workflows, company data, and operational standards through low-code tools. This means, for example:

• Law firms can build agents to generate documents reflecting their expertise and preferred style.
• Enterprises can orchestrate multiple agent types through Copilot Studio, coordinating teams of agents to tackle complex, multi-part business processes.

The rollout of multi-agent orchestration underscores Microsoft’s confidence in the maturity of agentic platforms to handle real-world, mission-critical roles—not just as workflow assistants, but as trusted counterparts in enterprise operations.

Embracing Open Protocols: Toward a Truly Open Agentic Web​

Microsoft’s ambition is not just dominance in agent platforms, but stewardship of open, interoperable standards for the rapidly evolving “agentic web.”

Model Context Protocol (MCP): An Open Standard for Agent and Model Interoperability​

Model Context Protocol is positioned as a linchpin for the open agentic web, and Microsoft is leading by example:

• First-party MCP Support: Broad integration across the company’s agent frameworks (GitHub, Copilot Studio, Dynamics 365, Azure AI Foundry, Semantic Kernel, and Windows 11).
• MCP Steering Committee Participation: Microsoft and GitHub are now active members, guiding the development and adoption of the protocol.
• MCP Server Registry Service: Designed to support up-to-date, centralized directories for MCP server entries, supporting both public and private agent deployments.

Most crucially, a new authorization specification enables secure sign-in and data/service access for agents and LLM-powered applications, reducing the risk of data leakage or unauthorized access—a major step towards trusted, scalable AI adoption on the open web.

NLWeb: The HTML of the Agentic Web?​

Microsoft introduces NLWeb, positioning it as a foundational web standard for the age of AI agents—in much the way HTML underpins the current internet. NLWeb offers:

• Conversational Interfaces for Web Content: Websites can expose a direct interface for interaction with AI agents, using their own models and data.
• MCP Server by Default: Every NLWeb endpoint doubles as an MCP server, making web content discoverable and accessible to agents with appropriate authorization.

The claim that NLWeb can do for the agentic web what HTML did for the World Wide Web is bold—and largely unverifiable until broader industry uptake and open-source contributions accrue. Nonetheless, this direction dovetails with broader industry trends favoring open, semantically rich web protocols.

AI for Scientific Discovery: Accelerating Humanity’s Next Breakthroughs​

Microsoft is keen to frame AI agents as more than productivity or business tools—they’re also catalysts for scientific progress. The company’s new Microsoft Discovery platform aims to:

• Empower researchers with agentic AI to overhaul the discovery process, from hypothesis to market-ready product.
• Offer extensibility so that R&D in any field—from drug discovery to climatology—can adapt AI-driven automation to accelerate cycles and open new scientific frontiers.

While the potential is undeniable, the impact of these initiatives will depend on real-world adoption and measurable advancements in actual research timelines. Nonetheless, Microsoft’s overture to the scientific community is strategically astute, promising to tie the company’s fortunes to some of the most urgent challenges of the coming decades.

Critical Analysis: Leadership, Risks, and What’s Still Missing​

Notable Strengths​

• Developer-Centric Vision: Microsoft’s deep integration of AI agent tooling across GitHub, Windows, Azure, and Microsoft 365 gives it a unified, end-to-end platform with global reach.
• Commitment to Open Standards: The backing of open protocols like MCP and the open-sourcing of key tools reflect a mature understanding of the risks of vendor lock-in and the value of ecosystems.
• Enterprise-Grade Governance: The fusion of agentic AI with established identity, compliance, and observability tools sets a new bar for responsible, large-scale enterprise deployments.
• Practical, Real-World Pilots: Use cases with prominent organizations bolster Microsoft’s claims of readiness for complex, high-stakes applications, rather than just proof-of-concept demos.

Potential Risks and Open Questions​

• Security and Abuse: The very capabilities that make agents powerful—autonomy, memory, the ability to act on behalf of users—create novel risks. The efficacy of Entra Agent ID and compliance tools hinges on user diligence and ongoing oversight. Past failures in identity management and cloud configuration remind us these controls are only as strong as their weakest link.
• Agent Sprawl: As organizations rush to deploy agents, unmanaged proliferation could create operational blind spots, increase security exposure, and stress compliance regimes.
• Open Protocol Adoption: Despite Microsoft’s efforts, true openness depends on robust uptake by competitors and neutral governance—especially if NLWeb or MCP become gatekeepers for the agentic web.
• Unproven Long-Term Value: While initial productivity and workflow gains are promising, it remains to be seen whether agent adoption generates sustainable business value—or merely shifts bottlenecks elsewhere.
• Transparency and Explainability: As agents are entrusted with increasingly consequential decisions, the demand for transparent, interpretable agent reasoning rises. Microsoft’s observability tooling is a start, but substantial research and tooling gaps remain.

The Road Ahead​

Microsoft Build 2025 signals a clear, comprehensive pivot toward an AI-agent-centered future, powered by a fusion of technical innovation, ecosystem stewardship, and enterprise pragmatism. With sweeping updates across Copilot, Azure, Windows, and Microsoft 365, and a renewed emphasis on open protocols and standards, Microsoft aims to make agentic AI accessible, governable, and transformative at every layer of the digital stack.
Yet, as with every platform shift, the reality will be shaped not just by platform capabilities and developer adoption, but by hard choices about trust, security, openness, and societal impact. The tools and protocols unveiled at Build lay the groundwork for a web where agents collaborate as both helpers and independent actors—and that web, as much as today’s, will need to be open, accountable, and above all worthy of our trust.
As the age of AI agents dawns, the challenge is clear: to empower invention without losing sight of the very real risks. If Microsoft and its partners can meet that challenge, the agentic web may prove as foundational to the next fifty years of computing as Windows was to the last. For now, the community will be watching—closely—as this bold new experiment unfolds.

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Source: Microsoft Microsoft Build 2025: The age of AI agents and building the open agentic web - Source Asia